Party City invests $4 million in Punchbowl, which now powers its digital invites platform

Party City, the party goods supplier and retail chain, has
taken a minority stake in digital invitations platform
the companies
today. The deal sees Punchbowl’s technology now
being used to power an online invitation platform on Party
City’s e-commerce site, opening up Punchbowl to an influx of
new customers.

While the official announcement didn’t disclose the size of the
an SEC filing
listing Party City Retail Group president
Ryan Vero points to an infusion of an additional $4 million.
Vero has also joined the board as a result of the deal, meaning
Party City will be working more closely with Punchbowl going

According to Punchbowl CEO Matt Douglas, Party City’s
investment and commercial partnership was only one of the
options on the table for his company.

Starting in mid-2016, Punchbowl began to see a lot of inbound
interest, leading to what he described as “several
alternatives” that the company could have pursued. But Douglas,
not looking to sell, saw the potential in working with the
large party supply retailer as a means of growing Punchbowl’s
own business.

Party City sees around $2.3 billion in annual revenue and
operates some 900 retail locations – which is how most
consumers know of the business today. But Party City is also a
vertically-integrated company, meaning they’re often the
manufacturer of party goods sold in other party stores, too.
Meanwhile, its e-commerce business accounts for around 10
percent of the company’s retail revenue today.

Punchbowl, on the other hand, never focused on physical goods.
Founded in early 2007, the service is one of the early
competitors in the digital invites and e-cards space, and a
rival to others like Evite.

The company, which now sees tens of millions of customers per
year, had bet on the demise of paper cards for things like
party invitations and greeting cards. It translated the paper
card format to digital – including with virtual envelopes that
opened to reveal your card, and even an option for including
digital gift cards inside its online cards.

Douglas admits Punchbowl’s growth has been a slow climb. “We’re
not a rocket ship,” he says. “We’ve really slow and steady,” he
notes, adding that “we’ve been profitable for several years

In other words, Punchbowl wasn’t in need of investment, but
rather choose to work with Party City as more of a strategic
business decision.

“These guys are smart, they get it, and they really respect our
expertise in [the area of digital cards.],” Douglas noted, as
to why he decided to work with Party City, despite the longer
path to launch due to it being a publicly-traded company. (The
two companies had first started talking a couple of years ago,
he said.)

The Party City deal focuses only on Punchbowl’s online
invitations business for now, but may expand to other cards in
the future. The ability to add Punchbowl cards to your order
for just a few dollars is marketed on the website, and will be
promoted in retail stores, too, at a later point.

Punchbowl has done other platform integrations like this over
the years, not all of which have lasted. Douglas can’t detail
those due to the nature of the deals, but notes that it had
worked with the Oriental Trading Company, TIME, RealSimple, and
it powered the backend of an unnamed service for selling

Along with the Party City deal, Punchbowl also today announced
a new deal with Disney-owned Marvel, which will allow it to
offer the only digital collection of invites featuring Marvel
characters. The company previously disclosed a partnership
with Disney back in 2014, which included Disney artwork for
Punchbowl’s invites. (That deal has been renewed for several
more years.)

But Marvel’s deal is not an expansion on the earlier Disney
deal – the Marvel organization is a separate entity, involving
a separate contract and team.

The Marvel collection – which includes characters from
Spider-Man, The Avengers, and Guardians of the Galaxy – is
live now, as is the

Punchbowl had raised $5.8 million in previous investments,
according to Crunchbase.


Featured Image: John Eder/Getty Images

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